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Federal Court rules in favour of Santos

In a significant legal victory for energy giant Santos (ASX:STO), the Federal Court has ruled in favour of the company, allowing it to proceed with the construction of a crucial undersea pipeline essential to its $US4.3 billion Barossa gas project. The decision came on Monday, overturning a previous court order that halted construction in November due to a legal dispute with an Indigenous landowner.

The dispute arose when Simon Munkara, a traditional landowner from the Tiwi Islands, sought to delay the pipeline project. Munkara aimed to stop the construction temporarily and demanded Santos conduct a fresh assessment of the pipeline’s potential impact on underwater cultural heritage.

However, Justice Natalie Charlesworth dismissed Munkara’s application on Monday, lifting the November court injunction and paving the way for Santos to resume work on the pipeline. Justice Charlesworth stated, “In respect of the claim founded on tangible cultural heritage, the evidence established is nothing more than a negligible chance that there may be objects of archaeological value in the area of the pipeline route.”

Santos, expressing satisfaction with the court’s decision, issued a brief statement on Monday afternoon. The company’s shares responded positively to the news, rising more than 2.5% to $7.74 by 2:30 pm.

With the legal hurdle now cleared, Santos is poised to recommence work on the undersea pipeline. However, industry analysts speculate whether the rush to resume construction is an effort to safeguard the project from potential disruptions arising from the ongoing $70 billion merger talks with Woodside. Unless there is a further appeal, Santos is expected to move swiftly to advance the Barossa gas project and the undersea pipeline connecting the Barossa gas field to a processing plant near Darwin.

The Federal Court’s decision not only marks a legal triumph for Santos but also raises questions about the interplay between indigenous rights, environmental concerns, and the broader economic interests of major energy projects in Australia.